This work addresses a question of fundamental significance: how does sensory reafference help maintain perceptual stability during eye and head movements? For example, a rightward eye movement adds leftward motion to the retinal image. This self-produced retinal motion - reafference - must be discounted to compute real-world (e.g., object) motion. Whenever this operation fails, a stationary background seems moving, a phenomenon known as the Filehne illusion. A similar compensation for reafference is necessary when optic flow is used to estimate the direction of self-motion (i.e., heading). Indeed, when tested in the laboratory, subjects are remarkably good at compensating for smooth pursuit eye movements and accuracy is little affected. But where in the brain does this reafference compensation for pursuit take place? Here we propose a 2-pronged approach, where (i) we record simultaneously from the dorsal medial superior temporal area (MSTd), the ventral intraparietal area (VIP), the visual posterior sylvian (VPS) and parieto-occipital area V6 and characterize how visual motion and/or heading tuning changes during pursuit eye and head movements (aim 1), as well as the reference frames in which visual and vestibular heading signals are represented (aim 2); and (ii) we use reversible chemical inactivation to silence neural activity in these areas while monitoring the animals' ability to perform a heading direction discrimination task in the presence of pursuit eye and head movements, as well as the magnitude and direction of the Filehne illusion. Importantly, our experimental design circumvents many technical and interpretational problems in previous studies, whereas optimal decoding analysis will address, not only single neuron, but also population responses. The general principles that we uncover should have wide application to problems in systems neuroscience, ranging from the electric fish to human cognition. In terms of health-related significance, although uncommon, loss of perceptual compensation for reafference has disabling consequences. Recent studies have shown that misattributions of agency in schizophrenia are based on imprecise predictions about the sensory consequences of one's actions; thus, understanding the neural basis of reafference will be important for further investigating this complex cognitive disorder. In addition, this work also addresses the neural basis of self-motion perception and navigation, which is relevant to spatial disorientation deficits in Alzheimer's disease.